Loser: Corn-o-copia

Extravagant subsidies and low coal prices have made for some strange ethanol projects

Making ethanol from crops has considerable, and growing, allure. As an energy source, bioderived ethanol is renewable, and its by-products are biodegradable. And, most important, to the extent that the ethanol takes the place of gasoline, it economizes on imported oil and can reduce greenhouse gas emissions.

Many countries are promoting use of the fuel, but so far Brazil is the ethanol exemplar. The alcohol accounts for about 20 percent of the fuel burned by automobiles there. About 70 percent of new cars sold in Brazil are flex-fuel vehicles that can run on a blend of biofuel and gasoline, and the country’s ethanol exports to Japan, Sweden, and other countries are expected to double during the next five years to more than US $1.3 billion [see ”The Omnivorous Engine,” in this issue].

Even the United States—where ethanol is made from corn rather than sugarcane, a relatively expensive and inefficient process—is experiencing an ethanol boom. Besides the 100 ethanol plants already operating, at least 40 more are under construction, and another 100 or so are planned.

Some of those projects make more sense than others. Among the least sensible is a facility near Richardton, N.D., that was scheduled to open last month. The Red Trail Energy plant, which is fueled by lignite, a dirty and inefficient type of coal, is scheduled to produce 50 million gallons of ethanol per year. Mick Miller, Red Trail’s chief executive, points out that the plant would comply with all relevant air pollution regulations. But carbon dioxide is not regulated in the United States, and per unit of energy used, the plant’s CO 2 emissions will be high.

What the Experts Say

T.J. RODGERS: The ethanol industry has this big-picture view: we do what’s good for the ethanol industry. Using hundreds of millions of dollars of soft political money, they have convinced the world that ethanol is currently a green fuel—which it is not.

The ethanol picture doesn’t have to look like that. In fact, the good news is that most new ethanol plants using up-to-date technology will help reduce oil imports and cut greenhouse gas emissions somewhat. But there’s ethanol, and then there’s ethanol. In today’s hothouse political climate, some weird projects have taken root along with essentially sound ones.

Making ethanol requires energy to drive biochemical conversion processes. First a corn mash or slurry is cooked and enzymes are added to transform starch to sugar, and then yeast is added to ferment the sugar into ethanol.

Traditionally, most ethanol factories have been relatively small mills, in which corn is crushed and processed. Such ”dry mills” typically produce 50 million to 75 million gallons of ethanol per year and are fueled mainly by natural gas. Larger plants producing upwards of 100 million gallons per year are more commonly ”wet mills,” where the corn is processed as a slurry. Wet mills typically rely on coal. But during the current construction boom, dry mills are being made larger, and more of them will also burn coal—about a quarter of the 40 under construction, by one estimate.

The growing reliance on coal is not, on the face of it, such an odd thing. Coal has been cheap relative to natural gas in recent years, and most ethanol plants are being built in parts of the country that rely heavily on coal for electricity anyway. The pursuit of energy independence, too, makes it tempting to use domestic coal to make an alternative fuel that will replace imported oil. But per joule of heat produced, coal releases two to three times as much carbon dioxide as natural gas, and that makes coal-generated ethanol a dubious way of reconciling energy and environmental imperatives.

Besides using coal to fuel the production plant, a lot of energy is used to fertilize and irrigate the corn, and further, the corn may also have to be transported a long way to the facility. On average, about 40 percent of the energy needed to make ethanol goes into growing the corn and about 20 percent is needed to transport it, with the production plant accounting for the other 40 percent. But, of course, the energy costs and emissions associated with farming and transportation can be much higher than average.

According to Nathanael Greene, an ethanol specialist with the Natural Resources Defense Council (NRDC), in New York City, coal-produced ethanol shipped a long way to its final destination and derived from corn grown with techniques that release a lot of carbon dioxide from the soil can actually have ”carbon impacts that might be worse than gasoline’s.”

What the Experts Say

NICK TREDENNICK: It is ridiculous to make ethanol from corn rather than sugarcane. The craziness comes from government interference in the market in the form of sugar subsidies and tariffs, reflecting politics and special interests.

Something like that scenario is found at the Red Trail Energy plant. Red Trail has assured North Dakota farmers that much of the 18 ­million bushels of corn needed each year will be bought locally, and Miller, its CEO, told IEEE Spectrum that all of it, in fact, will be bought locally. But earlier statements by the company suggest that at least some corn will be brought in by train or truck from other states. Doug Koplow, an expert on ethanol subsidies with Earth Track, in Cambridge, Mass., points out that because of the ethanol plant construction boom, even in corn-rich states like Iowa, corn may be shipped in from out of state to keep new plants running.

Coincidentally, the Red Trail plant’s inputs, outputs, and balances have been modeled by a team at the University of California at Berkeley. The work is part of what Berkeley’s Energy and Resources Group calls the ERG Biofuels Analysis Meta-Model (EBAMM).

Illustration: Mateusz Zdanko

The Berkeley researchers sought to evaluate a range of ethanol options. At one extreme, they placed a futuristic technology called cellulosic ethanol, still in development, which would derive the alcohol from crops like switchgrass. The cellulosic plants will have much better energy balances than corn ethanol, experts say.

At the other extreme, the researchers postulated a carbon-intense plant--specifically, Red Trail Energy’s. For the purposes of the study they assumed that the corn for the plant would come from Nebraska, where the energy needed to grow crops is about the highest in the United States, though they were careful to note that they could not say for sure where most of Red Trail’s corn will actually come from.

In the Berkeley model, the Red Trail plant emits 91 grams of carbon—strictly speaking, carbon dioxide equivalent—to produce the amount of ethanol necessary to generate a megajoule of energy. For comparison, the industry average for ethanol plants is 77 grams of carbon per megajoule, according to Ethanol Today , an industry publication. Cellulosic ethanol’s emissions are estimated at 11 gC/MJ.

In terms of net energy gain, the postulated carbon-intense plant yields 1.3 MJ per liter of ethanol produced, roughly a quarter of the 4.6-MJ/L energy yield obtained on average from ethanol plants using today’s usual technologies. The plant’s poor energy performance results from Nebraska’s energy-intensive farming. There is enormous room for improvement: cellulosic ethanol’s net energy is estimated at 23 MJ/L.

Bear in mind when considering these figures that calculations of energy, oil, and greenhouse gas balances are complicated not only by energy inputs and gas emissions in agriculture but also by those associated with the output mix. Besides producing ethanol, dry mill plants typically produce distillers’ grain, which is dried and fed to livestock. The larger wet mills produce a more varied and valuable range of products, including vegetable oil and other foodstuffs meant for people.

Ironically, the wet mills, which tend to be coal-fired, are classified as food-making facilities and therefore face relatively relaxed air regulation. They are subject to permitting procedures for major polluting facilities only if their emissions of any one specific pollutant exceed 100 metric tons per year. Owners of dry mills are now trying to get the U.S. Environmental Protection Agency to make them subject to the same liberal air regulation as wet mills.

What the Experts Say

GORDON BELL: It is crazy to be putting more CO 2 into the air with new factories.

Some of the more respected estimates of ethanol-versus-­gasoline balances have been done by Michael Wang, director of systems assessment in the Transportation Technology R&D Center, at Argonne National Laboratory, in Illinois. Wang has concluded that for a blend of 15 percent gasoline and 85 percent ethanol, with the ethanol produced from currently operating plants, wet ­milling—a reasonably close proxy for coal-made ethanol—yields a 13.7 percent greenhouse gas saving compared with straight gasoline. Dry milling—for our purposes, ethanol made with natural gas—yields an 18.8 percent improvement. The savings in net energy and imported oil are about the same, wet or dry: about 35 percent for energy and roughly 72 percent for oil.

Although the differences between the average coal and natural gas ethanol plants are not dramatic, consider how much better the job of making ethanol can be done. The NRDC’s Greene says four corn ethanol plants now under construction will have near-zero emissions. One of them, in Mead, Neb., is next to a cattle farm, so that methane from animal waste can be used to power the plant— a win-win situation. Two new plants in Minnesota are expected to rely on gasified biomass, and a demonstration facility in Illinois is being powered by thermal solar collectors.

The Nebraska plant is being built by E3 BioFuels, of Shawnee, Kan., with backing from the prominent venture capitalist Vinod Khosla. The facility is almost completely closed-loop—that is, virtually all its by-products will be captured and recycled, so that it will be nearly self-sustaining. It is designed to generate about 5275 joules in ethanol for every joule consumed in the production process, while a typical ethanol plant yields only 1375 to 1900 joules, Khosla claimed in a recent magazine article. Corn protein not good for making ethanol will be fed back to the cattle, and waste left over when methane is obtained from manure will be used to produce ammonia fertilizer for the cornfields.

That kind of plant may be eligible for especially high subsidies, but even the ordinary subsidies for corn ethanol are generous. To begin with, U.S. ethanol producers are protected from imports of cheaper Brazilian ethanol by a 54-cent-per-gallon tariff. Producers also benefit from a federal subsidy of 51 cents per gallon, additional state subsidies, and federal crop subsidies that can bring the total to 85 cents per gallon or more. Most important of all, language in the 2005 energy law mandates that billions of gallons of ethanol be blended into vehicle fuel each year, guaranteeing demand. Without that mandate, comments Jerry Taylor, a senior fellow at the Cato Institute, based in Washington, D.C., demand for ethanol would not be what it is, considering its price last summer on the Chicago Board Options Futures Exchange was twice that of gasoline.

A recent report done by Earth Track’s Koplow, ”Biofuels—At What Cost?” found that total U.S. corn ethanol subsidies are ”large, between $5.5 [billion] and $7.3 billion per year,” and soon will be even bigger, between $8 billion and $11 ­billion. Because the unit cost of displacing imported oil or avoiding carbon emissions is so highly subsidized, Koplow concluded, ”there may be many quicker and cheaper ways to achieve these same goals.” Worldwatch, an environmentally minded organization in Washington, D.C., came to essentially the same conclusion earlier last year.

Because ethanol made from corn yields such modest environmental returns at such a high price, groups like Worldwatch and the NRDC prefer to focus on next-­generation ethanol technologies. Never­theless, a few good corn ethanol plants are showing some ways to a better future. One is the Nebraska plant backed by Khosla. Another is the Goodland Energy Center in Kansas, where plans call for a coal-fired boiler to supply steam and electricity to a biodiesel production plant and an ethanol plant while also putting electricity into the grid.

That’s a big improvement on the way ethanol traditionally has been produced. But the best of all possible worlds would be a plant that runs on biofuels, perhaps its own waste products, and generates at least enough electricity to power itself—even though such plants are more expensive to design and build than your standard coal or natural gas mill.

Contemplating the closed-cycle approach, the NRDC’s Greene comments, ”There’s so much potential to do this right. Why step back with coal?”